4 Highly Effective Ways to Reduce Transportation Costs
In today’s freight market, shippers must work harder than ever to keep transportation costs down. Driver shortages, equipment shortages, and high fuel prices have come together to make shipping more expensive than ever. When everything seems to be driving transportation costs up, how can you make inroads into reducing them?
Here are four ideas to reduce transportation costs that you might not have considered just yet.
1. Build Great Carrier Relationships
When you’re working directly with asset carriers, relationships matter. Here are some of our best tips for building carrier relationships.
Pay Carriers Faster
Relationships with unpaid bills between two parties are always tense. It’s as true in transportation as it is in life. Making sure your asset carriers get paid faster and offering them transparency into the payment process makes carriers more likely to become loyal carriers.
Stay in Their Lane
While it’s not always possible, try to tailor the loads you give to your relationship carriers so that they’re within their preferred lanes. An easy way to do this is using a freight matching tool like FreightFriend’s Freight Guru. This allows them to better allocate their resources and control their costs. It also helps make up for those times you have to ask them to step outside their bubble.
Value Relationships over Margin
You’ve got to give loyalty to get it. By choosing to work with your relationship carriers even when they don’t offer the absolute lowest price, you show that the relationship means more than a couple of bucks.
Anything you can do to make nice with the drivers sent for your loads can go a long way towards building carrier relationships. When you treat drivers with respect, provide clean facilities, and load and unload quickly, you’ll soon become a shipper of choice. If you can be flexible when they arrive a little early or a little late, asset carriers will prefer to take your freight over other shippers.
2. Work Directly with Carriers
Great carrier relationships can pay off, allowing you to avoid using a freight broker for every load. You can work directly with the asset carriers to negotiate shipping contracts, avoiding the high margins associated with using a broker to ship your load. Truckload procurement software (like FreightFriend) can make it easy to secure capacity or source new asset carriers for a challenging or new lane.
That’s not to say that freight brokerages shouldn’t have a place in your transportation strategy. When you need a load covered fast or you need leverage in a shipping lane your network carriers aren’t able to cover, a 3PL can be a welcome lifeline and secure rates you couldn’t obtain on your own. The key is to diversify your transportation solutions so that you have options when you need it most.
3. Carry Out an Invoice Audit
Carrier invoice audits can allow you a little extra insight into how different carrier relationships are working out for you and provide insight into potential cost-saving measures. You might find internal practices that could help cut surcharges, or you may see that a carrier relationship isn’t really as strong as you’d hoped.
4. Consider Out-of-the-Box Solutions
There are plenty of out-of-the-box solutions for cutting costs, though the benefits will vary based on your specific situation.
If you frequently send out loads that aren’t full, consolidation, or LTL shipping, is one cost-cutting option you can employ. Load consolidation is also a great option if you’re struggling to make deadlines due to not having a full load ready.
If you’ve got a little room for flexibility, your asset carriers may be able to help you save a little money. For instance, you can move up a shipment date to avoid peak shipping times. Or, maybe you’ve got a deadline to make for certain products in an order but your carrier’s FTL capacity is very tight, so you send only the necessary pallets in an expedited LTL load and send the rest along when it works better for your carrier.
Seek Out Bulk Shipment Rates
When you can guarantee an asset carrier plenty of loads, you may be able to negotiate bulk rates to help cut your costs and save your carrier time and effort.
Transportation costs account for a large part of many shippers’ logistics budgets, but there are plenty of ways to reduce those costs and take control of transportation spend. Reach out to schedule a demo to see how FreightFriend can help you do just that.